Kenvue (KVUE) Morgan Stanley Global Consumer & Retail Conference summary

Transformation and operational progress

• Completed financial separation from former parent; 70% through physical separation, with full TSA exit expected by Q2 next year.

• Implemented a new playbook focused on reaching more consumers, driving efficiencies, and fostering a performance culture.

• Achieved significant cost reductions and gross margin expansion of 290 basis points in the first year.

• Launched a two-year modernization program (2024–2025) to invest in technology and automation, enabling $400 million more in brand activation.

• Confident in delivering high single-digit to low double-digit TSR through disciplined capital allocation.

Market dynamics and growth strategies

• Consumer health categories remain underpenetrated, offering substantial growth opportunities through education and innovation.

• Self Care segment outperforms the market, with strong share gains in Tylenol and allergy products.

• Essential Health shows volume recovery and increased distribution, leveraging category leadership in baby care and mouthwash.

• Skin Health and Beauty is in recovery, with focused strategies yielding double-digit growth in Europe and regained leadership in U.S. face care.

• Ongoing investment in marketing, innovation, and influencer partnerships to drive category penetration.

Financial outlook and efficiency initiatives

• Shift from price-driven to balanced price/volume growth, targeting two-thirds volume and one-third pricing.

• Gross margin gains expected to moderate to 20–30 basis points annually, supported by automation and network optimization.

• $350 million in cost savings targeted by 2026 through process automation and efficiency programs.

• Advertising spend increased by 20% in 2024, with further increases planned to reach competitive levels and drive ROI.

• Capital allocation prioritizes business investment, dividends, deleveraging, and potential future share buybacks.